HESTER BIOSCIENCES 2022-23 Annual Report Analysis

Fri, 25 Aug

HESTER BIOSCIENCES has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

HESTER BIOSCIENCES Income Statement Analysis

• Operating income during the year rose 13.2% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 9.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 20.6% in FY23 as against 25.7% in FY22.
• Depreciation charges increased by 24.8% and finance costs increased by 129.3% YoY, respectively.
• Other income grew by 11.8% YoY.
• Net profit for the year declined by 29.0% YoY.
• Net profit margins during the year declined from 16.8% in FY22 to 10.5% in FY23.

HESTER BIOSCIENCES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	2,350	2,661	13.2%
Other income	Rs m	137	154	11.8%
Total Revenues	Rs m	2,487	2,814	13.1%
Gross profit	Rs m	604	548	-9.3%
Depreciation	Rs m	166	207	24.8%
Interest	Rs m	41	93	129.3%
Profit before tax	Rs m	535	402	-24.9%
Tax	Rs m	140	121	-13.5%
Profit after tax	Rs m	395	280	-29.0%
Gross profit margin	%	25.7	20.6
Effective tax rate	%	26.2	30.2
Net profit margin	%	16.8	10.5

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HESTER BIOSCIENCES Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 1 billion as compared to Rs 969 million in FY22, thereby witnessing an increase of 53.5%.
• Long-term debt stood at Rs 2 billion as compared to Rs 2 billion during FY22, a growth of 12.3%.
• Current assets rose 17% and stood at Rs 2 billion, while fixed assets rose 20% and stood at Rs 4 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 7 billion as against Rs 6 billion during FY22, thereby witnessing a growth of 19%.

HESTER BIOSCIENCES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	2,600	2,797	7.6
Current Liabilities	Rs m	969	1,487	53.5
Long-term Debt	Rs m	1,645	1,849	12.3
Total Liabilities	Rs m	5,622	6,700	19.2
Current assets	Rs m	1,948	2,276	16.9
Fixed Assets	Rs m	3,674	4,424	20.4
Total Assets	Rs m	5,622	6,700	19.2

HESTER BIOSCIENCES Cash Flow Statement Analysis

• HESTER BIOSCIENCES's cash flow from operating activities (CFO) during FY23 stood at Rs 236 million, an improvement of 170.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -770 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 418 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -116 million from the Rs 35 million net cash flows seen during FY22.

HESTER BIOSCIENCES Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	87	236	170.8%
Cash Flow from Investing Activities	Rs m	-1,166	-770	-
Cash Flow from Financing Activities	Rs m	1,115	418	-62.6%
Net Cash Flow	Rs m	35	-116	-

Current Valuations for HESTER BIOSCIENCES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 32.9, an decline from the EPS of Rs 46.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,696.9, stands at 53.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.2 times, while the price to sales ratio stands at 5.4 times.
• The company's price to cash flow (P/CF) ratio stood at 37.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	276.2	312.7
TTM Earnings per share	Rs	46.4	32.9
Diluted earnings per share	Rs	46.4	33.0
Price to Cash Flow	x	41.2	37.3
TTM P/E ratio	x	59.1	53.5
Price / Book Value ratio	x	8.3	6.5
Market Cap	Rs m	21,552	18,152
Dividends per share (Unadj.)	Rs	10.0	8.0

Ratio Analysis for HESTER BIOSCIENCES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.5x during FY23, from 2.0x during FY22. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 5.3x during FY23, from 14.2x during FY22. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 10.0% during FY23, from 15.2% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 10.6% during FY23, from 13.6% during FY22. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 5.6% during FY23, from 7.7% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	2.0	1.5
Debtors’ Days	Days	86	109
Interest coverage	x	14.2	5.3
Debt to equity ratio	x	0.6	0.7
Return on assets	%	7.7	5.6
Return on equity	%	15.2	10.0
Return on capital employed	%	13.6	10.6

To see how HESTER BIOSCIENCES has performed over the last 5 years, please visit here.

HESTER BIOSCIENCES Share Price Performance

Over the last one year, HESTER BIOSCIENCES share price has moved down from Rs 2,127.6 to Rs 1,696.9, registering a loss of Rs 430.7 or around 20.2%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 27,642.3 (down 0.9%). Over the last one year it has moved up from 22,761.9 to 27,642.3, a gain of 4,880 points (up 21.4%).

Overall, the S&P BSE SENSEX is up 9.9% over the year.

(To know more, check out historical annual results for HESTER BIOSCIENCES and quarterly results for HESTER BIOSCIENCES)